I’m not totally disagreeing with your premise, but this is nonsense.
OK, maybe a bit of a dramatic statement, but looking back on how things were done prior to walmart makes it look pretty dumb that the model survived as long as it did. Buying at local small stores was like buying at convenience store prices due to muti-tiered distribution networks. The only broadly available way to bypass the big markups was mail order (catalogs were the Amazon before Amazon, allowing more centralized distribution). Sure, companies like Sears had somewhat mature supply chains (for the day) and more reasonable margin structure, but you had to be in a place with a Sears or do mail order.
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I’m certainly not saying there weren’t inefficiencies, there was a lot of rent seeking in the middle men for sure which good riddance, so we agree on that point totally. I think you are glossing over how a lot of supply chains were more localized though, which to me is a good thing, and a net negative that we have lost a lot of that. Though it seems to be heading back the other way a bit.
Man I miss the Sears catalog, ha. I just liked looking at it as a kid.
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I think a lot of the dislike that WM gets is recency bias. Many of these same claims had been laid previously against Sears and other mail order companies putting smaller, local retailers out of business.
You really need to pull back to the 30k ft level and look at the overall shifts in how goods get / got to market. From that perspective, WM was just the next link in the chain…and now the next link is Amazon.
Bring back the Silk Road!
Yep, and there are still plenty of poorly optimized supply chains in many industries today. While the systems and networks used for moving around mainstream consumer goods have become incredibly efficient, most of the big life sciences companies are running on spreadsheets and a prayer. All the regulations make them very slow to innovate and change. The margins are often so high on that stuff that they can get away with it, but it’s hugely wasteful and falls on it’s face with the smallest disruption. It’s a big reason drugs are so expensive. Covid was a bit of a wake up call for some of these companies, but they are still decades behind consumer goods and electronics.
Back to somewhat on topic - I don’t know too much about the cycling supply chain, but I understand most all the parts have to move through a wholesaler like QBP. Maybe that makes sense for certain shops or online retailers, but it seems like an extra layer that isn’t adding much value when you are buying from a big online source. Classic old school distribution model the made more sense when everything wasn’t online. But again, I’m far from an expert on the cycling supply chain and business model. There are still lots of examples of muti-tiered distribution and pricing controls, but at some point a company usually steps in and disrupts things. Cycling gear is so stupidly expensive and I have to believe the distribution model is a contributor. I hear many of the brands talking about transitioning more toward direct to consumer (ie Specialized), but they all seem to be struggling with it.
go carts, tools, and nice looking women in underwear. Pretty comprehensive.
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No, it’s like Walmart using taxpayer subsidies to fund their stores. It’s like Walmart closing a store in one community because they wouldn’t extend tax breaks, and literally opening a new store just down the road, across the county line. It’s like Walmart suing when the residents try to block their stores. It’s like Walmart forcing (yes FORCING) their vendors to outsource their manufacturing (or be dropped). It’s like Walmart denying their employees health benefits. It’s like Walmart forcing their employees onto social safety net programs that they don’t even contribute to. It’s like Walmart cheating their employees out of money they should have earned (they have been accused of underpaying employees numerous times). It’s like the Walton family donating HUGE amounts of money to some of the most noxious people and groups. It;s hysterical that the people that shop their rely on public assistance, and Walmart seems determined to keep them on it.
All of this is easily located on the internet.
They tried to open a store in a small community near my house. They did NOT want a Walmart, so they got the community officials to block it. A federal representative was taking donations from Walmart and did just about everything that he could to do force the municipality to accept the ‘offer’ from Walmart management. It got pretty heated, and lawsuits were filed. Finally there was a special election scheduled, and Walmart was handed their hat. They tried to sue saying the election wasn’t binding (even though they agreed to it before it turned them down) and the judge tossed the case. They finally left the community along.
After that, they accepted the plans for a Meijer’s store. Meijer’s is a full union shop, and gives generously to the local community, not politicians. Everyone seems happy, except for the Walmart organization, and the politician that I’m sure had to give the money back.
Walmart has used local taxpayer funds to get the land to build their store, and has even used those funds to build the building and parking lot, and then to make any updates to support the additional traffic. And they use predatory pricing to close any local competition, and then raise prices afterwards. Walmart is very good at wagging the dog, so to speak.
Check Opensecrets.org for Walton family donations…
But if Specialized is in trouble, perhaps they shouldn’t have been giving so many local bikes shops the finger and closing their accounts.
BTW: Who is going to end up with Trek? Apple? Peloton? The local bike shop that was kicked out of the Specialized dealer network switched to Trek, while a much smaller dealer is still a Specialized dealer. Go figure… I have three Specialized bikes from them, and a Cervelo, also from them in the middle of their ejection, and a Trek from a much older bike shop that also closed, ironically…
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Truly the total package!
Now I know I bought my last piece of Rapha.
What wallyworld has done to supply chains is not even close to what sears did. If you care to look at what they are doing overseas … its disgusting. Everything they touch turns into a never ending raise to the cheap (not “value”, CHEAP) no matter what.
Why?
With all the walmart talk, it reminds me of this piece from fastcompany which has apprently stuck with me for 20 years (where does the time go)
https://www.fastcompany.com/47593/wal-mart-you-dont-know-2
Unfortunately it’s paywalled these days, but rest assured beyond the pickle debacle in the teaser this article details the demise of Huffy. Oof, remember them? Yeah.
Found a cliffs-notes version of the article (reads like notes for an mba class):
http://www.kosmosbusiness.com/UserFiles/File/Books/CaseStudy2.pdf
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Is this a rumor or did it happen? I didn’t realize specialized was in the basement too
Hmmm…as someone who deals with Walmart nearly everyday, I’m not certain that extract is a fair representation. And I say that having many frustrations with WM overall.
Many of the “charges” levied against WM can be levied against almost any major retailer (however, you could also argue that WM laid the platform for them all to do it). I have been both screwed and rewarded by WM over the years….we have a line review coming up this fall and I do not have a good feeling about our chances. Suffice to say, it weighs on me. 
As for Huffy, that bed is largely of their own making. They were horribly managed in the 90’s, hung on to US manufacturing for too long, were not price competitive as a result and relied too heavily on their brand, which left them vulnerable.
Over the years, too many suppliers relied on WM as their savior, chased the volume and did not do proper financial assessments. The cry of “we’ll make it up on volume” was common….or “we’ll hammer our suppliers for cost concessions once we get the business”.
We have consciously built a customer base that is fairly broad….if I lose my business at WM, it is gonna hurt, but we’ll survive. But when WM is the overwhelming majority of your business, that reliance is on the supplier, not WM, IMO.
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Whe I got into the industry, I was amazed by all these companies, including big brands, that relied on distributors for sales. “Why aren’t these guys selling directly to shops, thereby offering lower prices while still making more margin?”
Two answers - volume and time. For many shops, they can’t take a full case of products, or if they did, it would amount to months of supply. Using a distributor, retailers can order the quantity they want / need.
This nestles into the second point - time. The retailer can sit down and write out one PO with a supplier (or smaller number of suppliers) and get a LOT of the products they need. “OK, here is my Shimano order, my helmet order, my grips, my tools, etc.”. Submit, done.
If they had to go to every supplier directly, it takes WAY more time and effort. Also related to time is delivery - everything comes in at once and you just deal with one shipment as opposed to shipments that trickle in all week and you are constantly dealing with “Chocolate Santa” (i.e. UPS delivery guy) and putting stuff away. (Incidentally, this also brings the cost of freight into the equation……you can get everything shipped for free, while if you order individually, you may not meet free freight minimums).
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this thread has not disappointed. 
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The rumor that I am hearing today was that it was Trek, not Specialized, that the Walton brothers bailed out.
Just to reiterate - that is the rumor I am hearing. It is not confirmed. That said, it seems to make more sense than the Specialized rumor, as Trek was supposedly hundreds of millions dollars in debt to Giant and others. With Specialized being 49% owned by Merida, even if they were behind on their payments / had excess inventory, it was to their owners, so they could structure a deal easier.
Still a bit skeptical personally that the Walton Brothers would make a move this big…we’ll see.
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